A record four million Kenyan crypto investors have suffered losses following the widespread digital assets market sell-off.
Following the crypto market rally that saw Bitcoin hit an all-time high in November last year, most investors in the country, especially the young, flocked to digital assets with the goal of profiting, The East African reported on June 21.
The investor data provided by blockchain analytics firm Chainalysis shows slightly above 3.07 million Kenyans who make up the formal employment sector. Therefore, this indicates that most of the investors might be students or individuals in the informal employment sector.
Drivers for crypto investments
Notably, most Kenyans are leveraging cryptocurrencies as a store of value for their savings, facilitating international transactions and purchases of goods.
The need to use cryptocurrencies in payments has been necessitated by the quick transaction time and minimal fees charged in fiat transactions.
Amid the market correction, experts have maintained that the current crash will be short-lived.
“The sell-offs should not worry crypto investors. What is happening is that some are moving their cryptos to less risky assets, just like what we have seen in the traditional financial markets,” said George Mwakisha, Kenya’s Binance representative.
Lack of crypto regulations
A majority of investors opted to buy assets like Bitcoin despite the continued warning from the country’s banking regulator the Central Bank of Kenya (CBK).
Although CBK is wary of cryptocurrencies, the institution’s governor Patrick Njoroge affirms that digital assets are vital in solving perennial challenges like onboarding the unbanked to the financial system.
Despite more Kenyans venturing into the crypto space, the sector remains highly unregulated. The lack of formal laws has resulted in scammers taking advantage with the country’s ICT minister revealing that investors lost almost $120 million in crypto scams across 2021.
Overall, the record crypto market sell-off has resulted in massive losses led by Bitcoin as the asset struggles to sustain gains above $20,000. Since the peak in November last year, the general market has lost its capital by almost $2 trillion.
The losses could expand further with analysts maintaining that Bitcoin is far from experiencing its previous highs. As reported by Finbold, Gareth Soloway, the chief market strategist at InTheMoneyStocks.com believes that Bitcoin might correct further to $10,000.
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